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Flexibility is a key word at the moment. We are looking for imaginative ways to continue to increase the supply of affordable housing. We have given the HCA greater flexibility on the grant rates that it pays to its investment partners. We are still looking for value for money, but we are balancing that consideration against the need to ensure that homes are built. The new rent to homebuy scheme will give registered social landlords an ongoing rental stream for reinvestment and a potential capital receipt later.

My hon. Friend has discussed the need for local authorities to be able to build houses. I agree. She will be aware of the measures in the Housing and Regeneration Act 2008 that allow councils to do that. Local authorities can now bid for social housing grant, so that they can add directly to the contribution to affordable housing that RSLs make.

We are taking this opportunity to buy new, unsold stock directly from developers. Since May, we have spent £160 million on 4,800 new homes for affordable housing. Given that the scheme has been running for only a few months, there has been great progress. Substantial further funding is available for other suitable homes at the right price.

Dr. Blackman-Woods: Will my hon. Friend clarify whether local authorities such as Durham city council—or, indeed, the new unitary authority in April—may apply to the Government for grants? May they apply in partnership with RSLs to buy houses or apartments that might be surplus in the private rented sector for use in the social rented sector?

Mr. Wright: The short answer is yes. We will shortly be consulting on provisions in the 2008 Act as to how local authorities can build new housing. That will be welcomed by all hon. Members across the House, because local authorities have a key role to play. One part of that is providing strategic delivery by establishing what housing, particularly affordable housing, is needed in their areas. The Liberal Democrat council has let my hon. Friend’s constituency down in that regard. Another part of the local authority’s role is providing a direct delivery route. That flexibility is important, and I hope that she will work with me, the HCA and others to achieve it. The key watchword is flexibility, and I shall continue to keep her and the House updated on developments.

Ambitious and proactive local authorities are in a strong position to help the construction industry and the local economy in tough times. My hon. Friend holds an extremely strong position in the region through her role as a deputy regional Minister. We need to keep in mind the bad news that we have had in our region in the past few days about job losses at Nissan. Local authorities have a key role to play in that regard. People will be frightened and concerned about the economic conditions and their continuing ability to afford a house. The Government are keen to address that, so that we can minimise repossessions as far as possible and provide housing that we are all proud of.

The key point is that we need to work together in partnership. I have mentioned my hon. Friend’s role as a deputy regional Minister and her strong position. Regionally, an action plan is being developed to tackle the effects of the credit crunch, and I look forward to seeing the results. We have a strong regional team at the
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HCA. The new regional director, Pat Ritchie, has asked me to facilitate a meeting with the new unitary authority and the HCA, and I am happy to do so. I would welcome my hon. Friend at the meeting to facilitate further ongoing work to ensure that affordable housing is provided in Durham.

Our goal is not only to build more housing, but to help more first-time buyers to take advantage of that housing. With that in mind, we have expanded and introduced schemes to help people to take their first step on to the property ladder. The HomeBuy Direct scheme gives people an equity loan worth up to 30 per cent. of the purchase price of a new build property on selected sites. The loan is offered jointly by the Government and developers, and there is no fee for the first five years. Some £400 million has been available nationally for the scheme, which we anticipate will help up to 18,000 people, while supporting house builders. I am pleased to say that my hon. Friend’s constituents might be among the first to benefit from the scheme, as there are seven sites within Durham city and another 15 throughout County Durham that offer homes through HomeBuy Direct. A number of other options are on offer, such as shared ownership schemes, rent to homebuy and subsidised rents. The key is flexibility, and the idea is to give people choice, so that they can choose the tenure and the scheme that best suits their circumstances.

We have primarily been discussing affordable housing, but that forms just one part of our plans for housing growth. The south and east Durham areas have recently been assigned as growth points and are joining the £600 million programme for the first time. That funding is being made available for the essential infrastructure, such as shops, schools and transport, that makes communities tick. My hon. Friend will know, as the chair of the all-party group on balanced and sustainable communities, that we cannot just plonk housing down without regard to the wider area, but her council has, unfortunately, done that in the past. We need to ensure that housing is properly planned to have a good, balanced community that has high-quality public services. Her constituency will benefit from a better marrying up of supply and demand through Durham.

I conclude by thanking my hon. Friend for the high-quality debate that we have had. We can work together with the Department, the HCA and the new unitary authority, which seems to have a more ambitious approach than the Liberal Democrat incompetence of the past, to ensure that we have the affordable housing in Durham that her constituents deserve.

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Police Funding (Gloucestershire)

1 pm

Mr. Mark Harper (Forest of Dean) (Con): It is a pleasure to serve under your chairmanship, Mr. Cummings. I know that the Minister for Security, Counter-Terrorism, Crime and Policing, the hon. Member for Gedling (Mr. Coaker), has been taken ill because his office has had the courtesy to phone my office. I wish him the best of health and hope to see him back soon. I am pleased to see that the Under-Secretary of State for the Home Department, the hon. Member for Tynemouth (Mr. Campbell), will be replying instead.

The background to this debate is that the Gloucestershire constabulary faces a tough future in the next couple of years. The funding formula allocation that it has been given by the Government rises by just 2.5 per cent. in each of the next two years, which is right at the bottom of the floor. The specific police grants that the constabulary gets have been frozen, except for the one that funds police and community support officers. That means that the overall settlement is lower still at just 2.1 per cent. Given that the inflation faced by police forces, which is largely outside their control, is running at somewhere between 3 and 3.6 per cent., that represents a real-terms cut and a significant shortfall in funding.

However, council tax payers in Gloucestershire are already hard pressed and we cannot afford to have a large increase in the police share of the council tax precept. Gloucestershire county council has delivered a record low council tax increase and I hope that the police authority will keep its low as well. For the Minister’s benefit, it is worth saying that the county council is working in close partnership with the police and has funded 63 new officers specifically to go out on the beat in Gloucestershire. That is welcomed by the people whom I represent.

Gloucestershire historically gets a poor deal for police funding from the Government and it is in the bottom six police forces for funding per head—£58 a head versus a national average of £81 a head. Even so, the spend per head by the police is about average for England and Wales. The circle has been squared by a higher than average council tax precept, and local people face an unfairly large proportion of the burden because the Government have refused to fund Gloucestershire police fairly. Will the Minister explain why Gloucestershire receives just 70 per cent. of the national average funding per head for its police services, which puts an extra burden on hard-pressed council tax payers?

In November, as I said, the Government confirmed the formula grant allocation rise of 2.5 per cent. for Gloucestershire for the next two years. In response to a request for information for this debate, the chief constable confirmed in a letter to me that

the one that pays for PCSOs—

That compares to an average increase of 2.8 per cent. in England and Wales, with metropolitan forces seeing an average increase of 3.1 per cent. Yet again, it seems that the figures show that the way the formula works out means that the Government are penalising rural, as opposed to urban, parts of the country.

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As I have said, total Government grant will increase by just 2.1 per cent, and my chief constable has said that the cost growth faced by the local police force is about 3.6 per cent. Consequently, that is about 1.5 per cent. above the increase in Government funding. Even if we are generous to the Government and use their estimate of cost growth—the gross domestic product deflator—that still shows cost increases running at more than 3 per cent. Why do we get such a bad deal from that funding formula in Gloucestershire? One of the principles underlying the funding formula averages out the differences between different parts of the police authority area. In a recent article in Policing Today, which I am sure the Minister has read, Gloucestershire’s chief constable, Dr. Tim Brain, explains:

as is Gloucestershire—

When the formula was introduced it was recognised that it was not perfect, so a damping mechanism of floors and ceilings was implemented to ensure that the impact on places such as Gloucestershire was reduced. In their Green Paper, “From the Neighbourhood to the National: Policing Our Communities Together,” the Government confirmed their plans to remove those floors, and the Minister with responsibility for policing has confirmed in the same language used in the Green Paper that they will be removed in due course. He said that it is the Government’s

Will the Minister explain exactly what that means? Given that most police authorities that benefit from the floors think that their removal will mean a significant reduction in their expenditure, it does not sound as if doing so would be financially stable. However, if that is the case, we will never move to a position where the floors and ceilings are removed. If the Government’s intention is to remove the floors and ceilings, either they believe that it will not have a significant impact on police authorities—I shall be grateful if the Minister will confirm that that is the Home Office’s view—or they are moving ahead regardless of the consequences. The answer to the parliamentary question to which I have referred is simply a tautology and the way in which it is currently written is meaningless.

In a letter to me last July, the chief constable said that

The Minister will know that Dr. Brain leads on financial matters for the Association of Chief Police Officers and is therefore something of an expert on these matters. Will the Minister confirm whether the Department agrees with the chief constable’s analysis of the financial impact on our county’s police force of removing the floors? Is it the case that, as Dr. Brain states in his article,

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Does the Minister think that the funding formula used to allocate funding accurately reflects the relative needs of different areas?

On some specific funding areas, the security grant is a good example of the Government’s requiring the local police to undertake certain responsibilities but not funding them properly. Between 2005 and 2007, the security grant for royal protection was cut by 9 per cent., but the same demands are still being made of the police. Perhaps the Minister could explain why that is the case and what local services he expects the constabulary to cut. Alternatively, does he expect local council tax payers to pick up the funding for what are essentially national security responsibilities?

Another example is funding for PCSOs. The Government grant provides only 75 per cent. of the funding required, which leaves the constabulary—the council tax payer—to find the funds elsewhere to meet that Government policy. I remind the Minister that, at the last election, the Government promised that 24,000 new PCSOs would be introduced during this Parliament. However, they reneged on that commitment and cut funding by £70 million in 2006. Most of the funding that was left went to the Metropolitan police, which gave local police forces a real problem. In summary, the cost of delivering Government-defined goals is increasing, but funding has been frozen. The Government have demanded that initiatives are followed through, but they have failed to maintain appropriate funding for them. As a result, other services must be cut or further burdens will be placed on local tax payers.

At the same time as funding is being held down, costs are rising. Things are particularly difficult at the moment. The Government have set police pay awards nationally at 2.6 per cent., which is above the rise in the grant given to Gloucestershire, and the crime fighting fund, which is supposed to fund the cost of police officers, has been frozen since 2004. That places a further burden on the police that is completely outside their control. Considering the impact of increased fuel prices and the increased price of imported products procured by the police force because of the weak pound, the chief constable’s estimate is that the police are facing an increase in costs at a rate of about 3.6 per cent., which is 1.5 per cent. higher than the funding that they receive from central Government. That gap has to be made up somehow.

The poor settlement might tempt the police authority to go for the easy option of sharply increasing the council tax precept to cover the costs imposed on our police force by the Government. That would be the wrong thing to do. In this particularly tough economic climate, with household budgets under pressure, it is essential that council tax increases are kept to a minimum, and the police authority must play its part.

Mr. Geoffrey Clifton-Brown (Cotswold) (Con): I am very grateful to my hon. Friend and constituency neighbour in Gloucestershire for giving way. He makes a cogent case about the financial difficulties that the police face. Does he think that there is a danger in that financial stringency, whereby small police stations in rural constituencies such as his and mine face the prospect of being closed to meet some of the cost pressures?

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Mr. Harper: My hon. Friend makes a very good point. The constabulary has significant cost pressures and is one of the more poorly funded police forces. If it is to do what I have suggested—keep council tax under control and not put a huge burden on local residents—it will have to look across its whole range of spending and make some economies. We do not want front-line police officers removed, but that limits the constabulary’s options, so it may have to look at rural police stations. I very much hope that it does not, and we hope that it is not forced to do so, but there is a real risk. The police authority must play its part in keeping council tax under control. It will be tough, but Gloucestershire residents will expect their constabulary and police authority to look for as many savings as they can without hitting front-line police officers and the front-line policing that we all want.

The county council works in partnership with the local police force. The council will deliver a record low council tax rise this year of just 2.9 per cent., and I hope that the police can aim for that sort of number, although I recognise that the Government’s financial settlement is less generous to the police than it is to the county council.

One very helpful thing has happened. Since 2005, the Conservative administration running Gloucestershire county council has delivered on its commitment to fund 63 new police officers throughout the county—broadly one for every county council division. The final officers will be in place by this May, and the measure has made a real difference by putting in place officers who are used for community policing—getting police out on the beat. They are named officers who are known to their local communities, and the policy has been a significant step forward.

One thing worth remembering, however, is that, because of the extra funding from the local tax payer, the Government like to claim that there are now more police on the street, but in Gloucestershire all of that increase has effectively been funded by the local council tax payer. If it was not for the increase in the council tax precept, we would have fewer police in Gloucestershire today than we had 11 years ago. Further, should the floor to the formula grant be removed, Gloucestershire will lose funding that is equivalent—the chief constable has calculated—to 62 constables, which is almost exactly same number that the county council has funded from the council tax over the past four years. That would be a retrograde step, and particularly damaging for policing in rural parts of the county, where we really appreciate those officers.

Martin Horwood (Cheltenham) (LD): I am sure that the hon. Gentleman is not arguing for uniformity of funding per capita throughout the country, because we in Gloucestershire hope that we never need the same police funding as somewhere such as inner-city Manchester; but will he confirm that the scenario that he rightly describes is a developing one, whereby we in Gloucestershire may face either cuts in police resources, or significantly increased council tax bills, or possibly both, and that it will not only hit the rural areas that he has described, but hit hardest some of the least well-off urban neighbourhoods?

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